Susie Walker, Partner and Head of Tax, has commented on the Autumn Statement 2023.

She said: “There was big money for big business, and a few extra pounds in the pockets of workers, but little to encourage or inspire start-ups and SMEs in the Chancellor’s Autumn Statement.

“The much trailed ‘full expensing’ tax break will only benefit our larger and successful companies as businesses need to be profitable to benefit from the tax relief on offer for investment in Plant and Machinery qualifying for the relief. The Treasury will be hoping that the measure boosts investment, drives productivity and helps to create more jobs, but it is likely to be some time before we see whether it works. It should also be noted that the relief is only available to companies and will not benefit other types of businesses such as partnerships. On the plus side, this provides some certainty for corporates considering significant spend. 

“The proposals for a new and ‘simplified’ R&D tax relief, combining the existing research and development expenditure credit and SME schemes were confirmed. These reforms will not be welcomed by the majority of smaller businesses, which will see a significant reduction in R&D tax relief. 

“The winners, again, will be the largest companies, which will see an increase in relief and enhanced ability to claim for subcontracted R&D.  Whilst the merged scheme has been described as a simplification, much of the potential benefit of a single merged scheme is undone by the need for a parallel scheme for “R&D intensive” SMEs. 

“Following a number of calls from industry and professional bodies for the merged scheme to be delayed, allowing for further consultation and policy design, it's disappointing to see that it will become effective next year, although key provisions are still to be developed." 

“A cut in the main rate of National Insurance from 12% to 10% from 6 January 2024 will lift earnings for 27 million people across the UK, at a time when they are likely to need it most, but realistically it won’t make a big difference to take-home pay.

“The rise in the National Living Wage next April and its extension to workers aged 21 and over will have a more noticeable positive impact. Unfortunately, the flip side is it will increase costs for employers at a time when they continue to grapple with higher costs across the board.

“A proposed consultation on “pot for life” pensions reforms raises the possibility of new and considerable administrative costs for employers if adopted. 

“At least there was early Christmas cheer for the hospitality sector with the announcement of a freeze on alcohol duty until 1 August 2024. The Chancellor said he had listened to the concerns of the Scotch whisky industry and kept down prices in pubs. Business rates relief for English hospitality, retail and leisure businesses will also be extended for a further 12 months, providing further support following the pandemic and ‘recognising the role of pubs and high street shops in our communities’.

“We’ll drink to that.”

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